Litigation is one of the most time-consuming, aggravating,
expensive and unpredictable risks that deal-makers have to face.
Unfortunately, in the litigious society we live in, if you
haven't already had the pleasure, you're probably overdue
for some sort of legal entanglement.

You'll know you've been sued when you receive a formal
notice. Generally, a written response must be filed within 20 or 30
days, depending on the court. So move quickly, or you may lose
valuable rights. First, find out if you're covered by one of
your existing insurance policies-for example, a homeowner's,
general liability or umbrella. You may be pleasantly surprised. If
so, contact your insurer promptly. Otherwise, they may point to the
fine print and claim that your delay has relieved them of their
obligations.

Whatever you do, resist the urge to contact your opponent
directly. Speak to your lawyer first. What you unwittingly tell the
other side in a casual phone call may really hamstring you
later.

Before you meet with your attorney, assemble a complete file.
Include all relevant documents: insurance policies, correspondence,
bills, canceled checks, contracts, contact information for
potential witnesses and so on. If you're not sure what's
important, bring it along anyway. Put together a blow-by-blow
written chronology. Your litigator will be thrilled. Best of all,
you'll save time and legal fees.

Early on, get your lawyer to outline a strategic plan and
budget. Of course, there are no guarantees things will go your way,
but to make intelligent decisions, you must get a frank evaluation
of the strengths and weaknesses of your case.

Above all, talk to your lawyer about alternatives to litigation.
Specifically, ask him or her whether you should consider
arbitration or mediation.

Basically, arbitration is streamlined litigation. Both sides
bring their quarrel to an impartial, private third party who is
empowered to make a final decision. At its best, it's cheaper,
less formal, quicker and more confidential than litigation.
However, unlike judges, arbitrators are not obligated to follow
legal precedent or procedure, and their decisions may be impossible
to appeal. An arbitrator may also corruptly favor a party who
throws them repeat business. Combine these risks with the legal
fees you'll already have to pay and re-evaluate whether you
might be better off in court.

In mediation, a neutral third party facilitates face-to-face
discussions between the parties. Unlike arbitrators, mediators have
no binding authority. However, by defusing anger and clarifying
issues, skillful mediators are surprisingly effective. In fact,
studies indicate that disputants are far more likely to honor their
mediated settlements than litigated outcomes.

Unlike on television, real-world lawsuits can drag on for years
as each side tries to harass and wear the other down. Eventually,
however, cooler heads will prevail and litigation will give way to
a cost-benefit analysis. Despite all the huffing and puffing early
on, nine out of 10 lawsuits settle out of court.

So when that summons arrives, remember the above. Perhaps
you'll avoid the fate author and critic Ambrose Bierce ascribed
to the typical litigant-who goes into litigation as a pig and comes
out as a sausage.

A speaker and attorney in Los Angeles, Marc Diener is the author of
Deal Power.